The state and market in Oman's development: conflict or cooperation?

Abstract

This thesis is a theoretically grounded empirical analyses of the economic and
social development of Oman particularly from the mid-1970s to 1995. The analyses
focuses on the major factors responsible for Oman's development particularly its
development policy and strategy which involved a systematic use of both the state via the
Five Year Plans and the market in inducing economic and social development of the
country. These instruments were crucial in the allocation of resources to the various
economic and social sectors of the country which secured relatively high rates of
economic and social development. A brief historical sketch of Oman's economy and
society highlights the significant transformation that the country has undergone since the
inception of development planning in the mid-1970s.
The study is located within the context of the global economy and international
policy and provides in particular a critical reappraisal of structural adjustment propagated
by the major world organisations such as the World Bank and the International Monetary
Fund. In this connection the thesis provides a critical appraisal of the 'market-friendly'
'minimal state' policies promoted (and required) by provisions under conditionality. After
analysing the role of the state in the development of some countries to provide a
comparative dimension, the study cautions against unselective or universal adoption of
structural adjustment and the privatisation package and hence a reduction in the role of the
state, which is supported by the Bank and International Monetary Fund or national
governments.
The research critically appraises the various theories of development from both the
development economics and development studies tradition; the study evaluates the plan
versus the market debate in relation to both the two theoretical traditions and international
policy of structural adjustment, and the theoretical assumptions underlying this. The thesis
shows the importance of the role of the state in securing economic and social development
including in some East Asian Countries. After analysing Oman's strategy in combining the
strengths of planning and the market processes in securing development, the thesis argues
that contrary to the neo-classical viewpoint now dominant, the case for rolling back the
state is questionable. On the contrary the thesis recommends a proactive role for the state,
in a number of spheres of Oman's economy and society including in industry and
agriculture. Specifically the research findings describe how a number of five year plans
have succeeded in both expanding and diversifying Oman's oil-dependent economy as
reflected in various indicators such as increase in per capita income and gross national
product, and in increasing social welfare as indicated by greater provision of education and
health services in the country.
The thesis finally offers some suggestions and recommendations in terms of dealing
with future problems that Oman have to encounter, including unemployment, need for
more (appropriate) trained labour force and greater diversification of the economy.